Abstract
This paper examines the impacts of access to extension services and cooperative membership on technology adoption, asset ownership and poverty using household-level data from rural Nigeria. Using different matching techniques and endogenous switching regression approach, we find that both extension access and cooperative membership have a positive and statistically significant effect on technology adoption and household welfare. Moreover, we find that both extension access and cooperative membership have heterogeneous impacts. In particular, we find evidence of a positive selection as the average treatment effects of extension access and cooperative membership are higher for farmers with the highest propensity to access extension and cooperative services. The impact of extension services on poverty reduction and of cooperatives on technology adoption is significantly stronger for smallholders with access to formal credit than for those without access. This implies that expanding rural financial markets can maximize the potential positive impacts of extension and cooperative services on farmers’ productivity and welfare.
Highlights
Adoption of improved agricultural technologies by smallholders is considered as the main pathway for breaking poverty trap
While it is increasingly clear that informal cooperatives can affect adoption decisions and welfare levels, it is likely to be heavily contingent on the specific technology, the type of resources required for getting access to it, and the socio-economic characteristics of members (Ito et al, 2012; Abebaw and Haile, 2013; Verhofstadt and Maertens, 2014; Latynskiy and Berger, 2016; Ma and Abdulai, 2016)
The results indicate that the average treatment effect on the treated (ATT) on the progress out of poverty index (PPI) score varies significantly with the propensity score and that the slope is positive for both extension access and cooperative membership
Summary
Adoption of improved agricultural technologies by smallholders is considered as the main pathway for breaking poverty trap. By pooling different resources such as credit, information, and labour among members, cooperatives can create economies of scale and improve welfare Against this backdrop, this paper seeks to examine the impact of extension access and cooperative membership on adoption of improved agricultural technologies and on household welfare outcomes. By focusing on a country that heavily relies on cassava, this paper uses empirical data to identify the causal effects of access to extension and cooperative services on the adoption of improved cassava varieties and household welfare. The remainder of the paper is organized as follows: Section 2 provides background information on the evolution of extension services and cooperatives and reviews the literature on the impacts of extension access and cooperative membership on technology adoption and household welfare.
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